Can the BRICS Sink or Save Cuba?

Just as I was about to overlook news of the first visit to Cuba by an Indian Foreign Minister in nearly 25 years,  during which it was agreed to “open new horizons” in the bilateral economic relationship, the following headline caught my eye: “Will the BRICS rescue Iran?”  It’s an interesting commentary that reflects on Iran’s economic relationships over the last several decades and concludes not only will the BRICS not save Iran, but actually, one by one they seem to be abandoning ship.

If that is the case - that the tightened sanctions on Iran will eventually convince Iran to strike a real deal with the negotiating parties (who at the present moment are having a tough go of it), owing to the overwhelming nature of the economic sanctions, might we surmise that more pressure applied to Cuba could break that government’s will as well? 

I'm not so sure, as there are several key differences to consider.  Foremost is of course the fact that Iran sanctions are increasingly multi-lateral, led by the U.S., while Cuba sanctions are essentially unilateral – America is the holdout, not the leader.  I can’t think of another country that actually has active economic sanctions in place against Cuba. 

The other key difference is that while Cuba leaves a lot to be desired on the rights front from the perspective of many Western nations, it just isn’t seen as a growing threat to global security.  Speculation aside about what Fidel Castro knew about the assassination of JFK, or about a U.S. medicare fraud epidemic carried out by Cuban American immigrants funneling their booty back home to banks that ought to have at least noticed the large deposits, there’s no smoking gun.  Or, rather, there’s no mushroom cloud.  (And no, I’ve not forgotten the tiny matter of Cuba on the U.S. list of state sponsors of terrorism, but for more than 15 years, State’s justifications for keeping Cuba on the list hardly read like those of countries like Iran, Syria, or say, Ghaddafi’s Libya, which came off the list in 2006.)  Sadly, these days it seems to take a 'rogue' nuclear program to get the U.S. to the negotiating table.

The lack of the sort of security threat that would allow – and truly motivate – the U.S. to rally the world behind its Cuba sanctions means that while doing business in Cuba can be awfully inconvenient for the rest of the world (and that’s without taking the country’s own confusing, closed business environment into account), the community of nations can’t be bullied over it.  And in fact, for a good many nations, relations with Cuba is a badge that confirms it won’t be bullied.

But it’s not the same for the global private sector.  Dutch bank ING just settled to the tune of $619 million with the U.S. Treasury Department over Cuban transactions it ran through U.S. banks until 2007, at which point it got out of Cuba altogether.  And it joins a list of several other major global financial institutions for which doing business with Cuba is getting nearly impossible without heat from the U.S.   The more banks the U.S. goes after for handling Cuban dollar deposits, the harder it gets for Cuba to conduct business with the rest of the world.  And given the choice between doing business in Cuba over U.S. objections, and just losing Cuban business, a lot of banks will choose the latter.

Given the increased Cuba sanctions enforcement under the Obama administration  – which has often been mischaracterized as offering nothing on Cuba but “unilateral concessions” (which include, essentially, the right of certain Americans to travel and give financial assistance to families and private businesses on the island) – for Cuba, courting economic powers like the BRICS is both symbolically and literally key during the difficult economic circumstances the island continues to face.   

And for their part, the BRICS seem willing and interested to return the embrace, if not to go all 'Hugo Chavez' about it.  Maybe they want to make a point about whether the United States should be able to single-handedly isolate a country economically (particularly one that has prioritized medical assistance around the globe) and in ways that impinge on other countries economic rights.  Or, maybe they just mean to make a few strategic economic investments in what is, for the moment,  an island nation of little obvious or immediate strategic importance, but could one day be an oil-producing shipping hub just a day's sail away from the world's biggest economy.  Either way, don't look to the BRICS to save or sink Cuba.